An insurance policy sells for $1,000. Based on your past data, an average of 1 in 50 policyholders will file a $9,000 claim, an average of 1 in 100 policyholders will file a $24,000 claim, and an average of 1 in 250 policyholders will file a $55,000 claim. Find the expected value for the company per policy sold.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
An insurance policy sells for $1,000. Based on your past data, an average of 1 in 50 policyholders will file a $9,000 claim, an average of 1 in 100 policyholders will file a $24,000 claim, and an average of 1 in 250 policyholders will file a $55,000 claim. Find the
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
